BULLETIN NO.: MGR-98-013
TO: All Reinsured Companies
All Risk Management Offices
All Other Interested Parties
FROM: Kenneth D. Ackerman /s/ 6/4/98
Administrator
SUBJECT: Approved Appraisal Deviation and Release Date for Texas Non-irrigated ELS
Cotton
BACKGROUND:
Continued dry weather across much of Texas has inhibited seed germination of non-irrigated
Extra Long Staple (ELS) cotton planted by the April 30, final planting date. ELS cotton
policyholders have requested that the Risk Management Agency (RMA) deviate from approved
policy and procedure and permit them to destroy these fields before an accurate appraisal
can be made in order to plant a cover crop (such as "haygrazer") for conservation purposes
and to control weeds.
Earlier this year, RMA issued an informational memorandum to remind companies of approved
policy and procedure regarding the planting of non-irrigated ELS cotton in Glasscock, Midland,
Reagan, and Upton Counties, Texas. RMA had received reports that some producers planted this
cotton in anticipation that the ELS planted acreage would fail to produce a crop and plant a
second insurable crop. The memorandum reminded insurance providers of the policy and
procedure requirements for accurately determining damage and potential production before
releasing acreage for another use. There are no approved procedures for determining production
potential for fields that have been dry planted and do not receive adequate moisture to cause
the seed to germinate. In recognition of the inability to make accurate appraisals, insurance
providers have been deferring appraisals on ELS cotton that has not emerged.
The Natural Resources Conservation Service (NRCS) indicated that under current conditions,
and in anticipation of continuing dry weather, it may be appropriate for some producers to
plant a conserving cover crop in order to prevent erosion and make better use of any moisture
that the area may receive over the next few weeks. NRCS advises that this may not be the
best practice in all cases and that producers will need to assess their individual
situations before opting to disturb these fields to plant a conserving cover crop.
In order to assist producers who conclude that putting the ELS acreage to another use at
this time is in the best long-term interests of their farming operations, RMA has determined
that an appraisal deviation to accommodate these decisions should be approved.
ACTION:
For the 1998 crop year only, upon issuance of this bulletin, insurance providers are
authorized to release Texas non-irrigated ELS cotton acreage as specified below.
Non-irrigated ELS cotton that has not emerged as of June 4, 1998, may immediately request
insurance providers to appraise and release such acreage with a "zero" appraisal.
Acreage on which the non-irrigated ELS cotton has emerged at the time of the appraisal must be
appraised using the applicable appraisal determination procedure, i.e. the stand reduction
method. However, if hail damage should occur, use the stand reduction method in
conjunction with the hail damage method for cotton, stage VI or greater.
Insurance providers will instruct loss adjusters to fully document the acreage released
under this deviation and reference this bulletin number in the remarks section of the
loss documentation or on any other form which will be maintained in the file as part
of the loss documentation.
CC: FCIC COMPLIANCE OFFICES
FCIC REGIONAL SERVICE OFFICES
CFSA (ATTN: JOHN STENCEL, FAX: 202-690-2823; PH: (202) 690-2807, RM. 3096 - S
MANDY WELTON, FAX: 202-205-2953; PH: (202) 720-6803
DIANE SHARP, FARM PROGRAMS, FAX: (202) 690-2130
NATIONAL CROP INSURANCE SERVICES
AMERICAN ASSOCIATION OF CROP INSURERS
CROP INSURANCE RESEARCH BUREAU
NATIONAL ASSOCIATION OF CROP INSURANCE AGENTS
NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS
LINDA VICKERS
HAWKINS, HAWKINS, AND BURT
ATTN: DAVID BURT - FAX 904-258-1311
501 SOUTH RIDGEWOOD AVENUE
DAYTONA BEACH, FL 32114
CC: K. ACKERMAN IS - PLEASE ROUTE
MGR/CHRON DAM-RSO
SDITTRICH CHIEF/FUS - PLEASE ROUTE
MMULUGETA CHIEF/CS - PLEASE ROUTE
HBAKER/RSLB - PLEASE ROUTE
GWESTMORELAND/RCD--PLEASE ROUTE
LDITTUS/ENAP - PLEASE ROUTE
CC: KANSAS CITY OFFICES:
TWITT/R&D--PLEASE ROUTE
TIM HOFFMANN - PRODUCT DEVELOPMENT BRANCH
VONDIE O'CONNER, RESEARCH AND EVALUATION BRANCH
LARRY STIFFLER, ACTUARIAL BRANCH
DENISE HOFFMANN, FISCAL OPERATIONS AND SYSTEMS BRANCH
AGILMORE/AMC-PLEASE ROUTE
FINAL:Michael Hand:mh:690-2499:Claims Services Division